HEALTH FINANCING PROFILE - ARGENTINA

Argentina has one of the highest levels of GDP per capita in Latin America and has historically spent a considerable portion of GDP on health. It has, however, lagged far behind other upper-middle income nations on several health measures such as life expectancy, infant mortality, maternal mortality and under-5 mortality (table 2).1

Approximately 40% of Argentina’s population remains uninsured and the government has a constitu-tional responsibility to finance and provide health services to this population. The poor northern prov-inces have a higher percentage of uninsured (approximately 60%) and public facilities in these regions are more poorly provisioned and staffed. This disparity in coverage and quality of care between poor provinces and rich ones is echoed in health outcomes between these same provinces. Outcomes in poor provinces are often several orders of magnitude worse than in rich ones.1

At the federal level, the government has initiated several programs with national coverage to address these provincial inequalities. Several results-based financing mechanisms have been implemented to offer incentives to provinces and health providers for improved health outcomes. Plan Nacer – now succeeded by Programa SUMAR – is the most ambitious of these programs and has reached over 90% coverage of the target population.2

Health Finance Snapshot

Argentina has consistently spent a relatively high percentage of GDP (8 to 9%) on Total Health Expenditures (THE).

General Government Expenditure on Health (GGHE) fluctuates, generally remaining close to 60% of THE while private insurance remains a smaller but important portion of health spending.

Table 1. Health Finance Indicators: Argentina

1995 2000 2002 2003 2005 2007 2009 2012Population (thousands) 34,855 36,931 37,657 38,001 38,681 39,368 40,062 40,765

Total health expenditure (THE, in million current US$) 21,450 26,196 8,484 10,648 15,260 21,553 29,047 40,889

THE as % of GDP 8 9 8 8 8 8 9 8

THE per capita at exchange rate 615 709 225 280 394 547 725 892

General government expenditure on health (GGHE) as % of THE 59.8 53.9 53.6 51.7 53.5 58.2 66.0 69

Out of pocket spending as % of THE 28.0 29.0 29.8 31.1 29.9 25.7 20.1 20

Private insurance as % of THE 11.0 14.0 13.0 14.0 13.0 13.0 11.0 8.0

Source: WHO, Global Health Expenditure Database; National Health Accounts, Argentina

4Out of pocket spending (OOPS) in Argentina remains lower than in many other Latin American countries as a portion of THE (Figure 1).

4OOPS are, however, regressive in their incidence with households in the lowest income quintiles pay-ing a higher percentage of their income in OOPS than households in the highest quintiles (Figure 2).

Source: WHO, Global Health Expenditure Database; National Health Accounts, Argentina

Figure 1. Total Expenditures on Health by type, Argentina

Source: Ministry of Health, Argentina. “Encuesta de Utilizacion y Gasto en Servi-cios de Salud Argentina – Year 2010” (2012)

Figure 2. OOPS as % of Income by Income Quintile, 2010

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Health Status and theDemographic Transition

Argentina has undergone the demographic and ep-idemiological transitions so that it finds itself with an aging population suffering increasingly from chronic non-communicable disease and less from communicable (infectious) disease. However, on several important measures such as maternal and infant mortality, outcomes are stratified. For ex-ample, the poor provinces of Formosa and Jujuy had a maternal mortality rate over 100 (per 1,000 live births) in 2008 while the city of Buenos Aires had a rate of just 9.3

Source: United Nations Statistics Division and the Instituto Nacional de Estadistica y Censos, Argentina.

Table 2. International Comparisons: Health Indicators

ArgentinaUpper Middle

Income Country Average

% Difference

GNI per capita (year 2000 US$) 5,170.0 3,420.8 33.8

Prenatal service coverage 99.2 93.8 5.4

Contraceptive coverage 78.3 80.5 -2.8

Skilled birth coverage 94.9 98.0 -3.3

Sanitation 90 73 18.9

TB Success 48 86 -79.2

Infant Mortality Rate 12.6 16.5 -31.0

<5 Mortality Rate 14.1 19.6 -39.0

Maternal Mortality Rate 44 53.2 -20.9

Life expectancy 75.8 72.8 4.0

THE % of GDP 8.0 6.1 23.8

GGHE as % of THE 60.6 54.3 10.4

Physician Density 3.2 1.7 46.9

Hospital Bed Density 4.5 3.7 17.8

Source: World Bank, DataBank. Health, Nutrition and Population Statistics. Source: WHO, Global Burden of Disease Death Estimates (2011)

Figure 4. Population Pyramids of Argentina

Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision.

Source: WHO, Global Burden of Disease Death Estimates (2011)

Demographic Transition

4Birth and mortality rates are declining (figure 2).4The total fertility rate (TFR) has fallen from 3 in

1990 to 2.3 in 2012.4The ‘bulge’ in the population pyramid is moving

upward (figure 4).

Epidemiological transition

4Mortality from non-communicable (chronic) ill-nesses has far surpassed infectious disease mor-tality (Figures 5 and 6).

Figure 3. Demographic Indicators, Argentina

Crude birth rate(per 1,000 population)

Infant mortality rate (per 1,000 live births)

Under-5 mortality rate (per 1,000 births)

90-9475-7960-6445-4930-3415-19

0-4

MaleFemale

1000 0 1000 2000 0 20002000 0 2000

1950 1980 2010

Respiratory Infections

Maternal & Perinatal

Communicable Diseases

Non- Communicable Diseases

Figure 5. Mortality by Cause, 2008, Argentina

Figure 6. Non-Communicable Disease Mortality, 2008, Argentina

Health System Financing and CoverageArgentina’s health system has historically been split into three distinct regimes: the public system which is free for all, the Obras Sociales (OS) which provide coverage in a mandatory contributo-ry social health insurance scheme, and a supplementary private insurance system. Numerous providers exist in both the OS and

private systems, both at the national and provincial levels. The public system has been decentralized since 1993. These three re-gimes are fragmented but Argentines under each regime utilize a mix of public, private and OS facilities and services leading to a complex web of OOPS and cross-subsidization between systems.

Figure 7. Timeline of Argentina’s Health System

1943 1949 1971 1993 20051996 2007

Creation of the Direc-torate of Public Health and Social Assistance.

Directorate of Public Health and Social Assistance becomes the

Ministry of Health.

Comprehensive Medical Assistance Program (PAMI) created to provide health benefits to retired workers.

Decentralization of health service provision from the

federal to the provincial and municipal levels. National

MOH retains regulatory role.

FESP (Essential Public Health Functions and Pro-grams Project) initiated.

Plan NACER introduced (maternal & child

health). Later expanded to Plan SUMAR.

Creation of the Superintendency of Health Services (SSS) in the MOH.

Administrative, economic and financial, oversight body for all agents in Argenti-

na’s National Health Insurance.

Table 3. Types of Health Coverage — Argentina

Beneficiaries Source of Financing Service Provision Benefits

Public Indigent, informal workers, unemployed.

General taxation (mainly federal budget). Public facilities. Regulated at the provincial and municipal levels which provide

their own outline of mandatory services covered.

Mandatory Contribu-tory Social Security (Obras Sociales), other than PAMI

Workers in the formal sector and independent workers

who pay contributions through the AFIP (‘monotri-

butistas’).

-Mandatory employee (5% of wages) and employer (3%)

contributions.-Fixed voluntary monthly payment for independent workers– varies based on

income.

Mainly Private facilities and Decentralized Public Hospitals.

-National OS subject to the MOH-supervised Mandatory Health Program (PMO). Mandated coverage of 95% of the causes of outpatient, surgical and hospital care, dental care, mental

health, rehabilitation and palliative care. - Provincial OS are not required to adhere to PMO coverage rules

but have their own lists – benefits vary.

Prepay Private Insu-rance (EMP)

Those who are able to prepay or whose employers provide

optional supplemental coverage.

Prepaid premiums of beneficiaries and/or their

employers.Mainly Private facilities.

Subject to the MOH-supervised Mandatory Health Program (PMO). Mandated coverage of 95% of the causes of outpatient, surgical and hospital care, dental care, mental health, rehabilitation

and palliative care.

Comprehensive Medical Assistance

Program (PAMI)

Contributory Retirees and Pensioners (and dependents).

Employee and Employer contributions.

Private facilities and Decentrali-zed Public Hospitals. Coverage mandated as with the other OS

(see above).

Source: Ministry of Health, SSS, Argentina.

Argentina’s health system has several broad coverage regimes which are not only separate from one another, with fragmented risk and financial pools, but are also internally fragmented as well.

1. Public sector: Non-contributory. Covers the uninsured but Argentines with contributory insurance also utilize public facilities at times. Services are provided for free at public facilities which have fixed budgets (i.e. unrelated to outputs/results) and are run by decentralized provincial and municipal governments with financing mainly from the federal budget. Explicit enroll-ment is not necessary. A number of supplementary programs based on Results-Based Financing (RBF) principles exist (table 4).

2. Contributory Social Insurance (Obras Sociales), other than PAMI (see below): Run by trade unions and professional organi-zations. Over 250 in existence although a small percentage dominate the market share. Workers and their employers make mandatory payroll contributions. Beneficiaries primarily utilize private facilities. There exists a redistributory mechanism be-tween different OS to offset the cost of high-cost and low-prevalence illnesses for smaller OS with fewer financial resources.

3. Private Health Insurance (EMP): Voluntary prepaid contributory regime. Has close to 200 insurers nationwide, both non-profit and for-profit although market share is dominated by just a few for-profit insurers. Premiums are set by each insurer and vary across individuals. Insurers contract with private facilities as well as with independent health providers to pay for services for private beneficiaries.

4. Comprehensive Medical Assistance Program (PAMI): Later called National Institute for Retirees and Pensioners (INSSJyP). PAMI comprises contributory health coverage for retirees and pensioners and their families affiliated with the Obras Sociales. Services are provided free of charge at public facilities and some private facilities.

2000 0 2000

References

1 World Health Organization. Global Health Observatory, Interagency estimates.

2 Cortez, Rafael and Daniela Romero. “Argentina: Increasing Utilization of Health Care Services among the Uninsured Population: The Plan Nacer Program”, The World Bank UNICO Studies Series, No 12, 2013.

3 Belló, Mariana and Victor M. Becerril-Montekio. “Sistema de Salud de Argentina”, Salud Pública México, vol.53 suppl.2, 2011.

4 Ministry of Health, Argentina. “Encuesta de Utilizacion y Gasto en Servicios de Salud Argentina – Year 2010” (2012)

5 Cavagnero, Eleonora and Marcel Bilger. “Equity during an economic crisis: financ-ing of the Argentine health system”, World Health Organization, discussion paper, No. 3, 2009.

This profile was prepared by Dr. Deena Class, A. Sunil Rajkumar and Eleonora Cavag-nero with inputs from Michele Gragnolati.

Challenges and Future Agenda

4While the richest income quintiles mainly utilize private facilities, a full 17.4% of the richest quintile and 25.9% of the sec-ond-richest utilize public facilities (figure 10). This has led to cross-subsidization of the private sector by the public sector as public facilities are rarely reimbursed by private insurers or OS.

4The fragmentation of the Argentine system is an ongoing issue. Risk and financial pools are fragmented between the public sector, the Obras Sociales and the private insurance regime. However, internal fragmentation within each regime

has also been blamed for inefficiencies and also for heterogeneous quality of services among different regions, provinces and facilities.5

Table 4. Selected Supplementary Public Health Programs Based on Results-Based Financing (RBF) Principles

Goals Eligible/Target Population Financing Benefits & Service Priorities

Essential Public Health Functions and Programs Project (FESP I and II)

Essential Public Health Actions

- Improve the stewards-hip role and appropriate

regulatory environment of the nation’s public health system.

Varying target popu-lations for the various

programs.

Provinces and municipalities receive performan-ce payments based on number of Public Health

Actions achieved (from an agreed list of Actions).

• Vaccine-preventable diseases;• Tuberculosis;• HIV/AIDS;• Vector-borne diseases;• Non-communicable diseases;• Safe blood.

“Incluir Salud” Program- Public health insurance

program for extremely vulne-rable and uninsured people.

Women with seven or more children, severe-ly disabled people and

population over 70 receiving non-contri-

butory pensions.

- Capitation payments to provinces based on enrollment of qualified beneficiaries (the size of the payment given per beneficiary depends in part on provincial achievement regarding a set

of performance indicators).- The financing received by the provinces is used

to make fee-for- service payments to public health facilities treating beneficiaries.

Range of preventative and curative servi-ces covering diseases like kidney failure;

hemophilia; Gaucher’sdisease; HIV, Fabry’s disease; multiple sclerosis, amyotrophic lateral sclerosis,

cystic fibrosis and hepatitis C.

Plan NACER/SUMAR

- Decrease infant and mater-nal mortality rates.

- Increase utilization and quality of key health services

for the target population.- Improve institutional mana-

gement by strengtheningthe incentives for results.

Women (aged 20-64) and children (< 20) not enrolled in any contributory health insurance scheme.

- Similar financing mechanism as in the case of “Incluir Salud” (see above).

- The provincial performance indicators here are measures of coverage/attainment among the

target population (e.g.: pre-natal care coverage, cancer screening, etc.).

Basic package of free services for:• Maternal and child basic care;• Preventive health care;• Certain types of complex care (conge-

nital heart disease surgery, inpatient neonatal care, others).

Source: Ministry of Health, Argentina and The World Bank: Projects and Operations, Argentina.

Source: Belló and Becerril-Montekio. “Sistema de salud de Argentina”, 2011.

Figure 8. Health Beneficiaries by Type of Coverage

Figure 9. Service Utilization by Income Quintile, 2010.

Access to and utilization of medical consultations and medications in Ar-gentina is high, even among the lowest in-come groups4 (figure 9).

In 2010, 34.7% of all medical consultations took place in public fa-cilities, 20.1% in OS fa-cilities and 45.2% in pri-vate facilities4.

Figure 10. Type of Facility Utilized by Income Quintile, 2010.

Source: Ministry of Health, Argentina. “Encuesta de Utilizacion y Gasto en Servicios de Salud Argentina – Year 2010” (2012)

Source: Ministry of Health, Argentina. “Encuesta de Utilizacion y Gasto en Servicios de Salud Argentina – Year 2010” (2012)